Late Recovery Sees Wall Street Slide Stabilise

The Nasdaq closed lower on Friday though well above its session low as selling eased late in the day after investors dumped heavyweight technology stocks due to concerns about high valuations and a patchy economic recovery.

The major indexes regained some ground in late afternoon though trading was still volatile.

At its lowest point of the day the tech-heavy Nasdaq fell as much as 9.9 percent from its record high reached on Wednesday and the S&P 500 dipped briefly below its pre-crisis record, reached in February, although it too closed well off session lows.

Mega-cap companies such as Apple, Microsoft, Amazon.com and Facebook also pared losses though of that group only Apple managed a very tiny gain for the day.

"You had a significant sell-off on Thursday, some follow-through in the morning and then we stabilized. The selling was pretty fierce," said Michael Antonelli, market strategist at Baird in Milwaukee.

"Corrections like this have been quick and severe lately. We don't know if its over," he said. "The fact we stabilised today could be a good sign."

While Thursday's sell-off already reflected investor fears that valuations for the Nasdaq high-flyers had overheated, the worries were exacerbated on Friday by the Financial Times and others reporting that options trading by Japan's Softbank had inflated these stocks.

"We've started to see signs of weakness in the last few days, notably yesterday. Then you get a headline like the FT story. That really adds fuel to the fire on the downside," said Jeffrey Kleintop, chief global investment strategist at Charles Schwab in Boston.

Earlier on Friday, the Labor Department's closely watched employment report showed the jobless rate improved to 8.4 percent from 10.2 percent in July, better than analysts had anticipated. Non-farm payrolls, however, increased less than expected last month.

The Dow Jones Industrial Average fell 0.56 percent, to close at 28,133, the S&P 500 lost 0.81 percent, to 3,427 and the Nasdaq Composite dropped 1.27 percent, to 11,313. (Reuters)